The American Hospital Association (AHA) is calling for the U.S. Department of Labor to investigate the business practices of New York-based data analytics firm, MultiPlan, following a comprehensive probe by the New York Times.
The nearly half-century-old MultiPlan, which offers data analytics solutions for over 700 payers, is reported to save these payers approximately $22 billion annually by working with large payers to negotiate reductions in reimbursements for out-of-network medical providers. The beneficiaries of these practices include the company itself and its insurer clients, who realize billions in profit. However, these practices have negative impact on patients and employers who see increased costs, the inquiry explains. The investigation was based on a huge array of documents, and interviews with former MultiPlan employees, patients, doctors, and medical billing experts.
Concerns raised by the New York Times investigation include apparent incentivization for MultiPlan and its payers to minimize recommeded payment amounts for treatments from providers outside of their insurance network. This strategy is evidently advantageous for both parties, as their fees increase when reimbursements decrease.
Notably, these negotiations are purportedly established to counter overbilling, but, ironically, MultiPlan and its payer partners earn billions from subsequent savings and fees. The investigation also highlighted that UnitedHealth Group alone generates approximately $1 billion annually in fees from employers due to its involvement in these out-of-network savings initiatives.
In many cases, patients are stuck with hefty bills due to treatment by out-of-network providers, and costs for self-funded employers also rise due to MultiPlan’s processing fees. The AHA has demanded that the Department of Labor launch an immediate investigation to hold MultiPlan and its insurer partners accountable for what the AHA describes as ‘unconscionable practices’.
In response to these allegations, MultiPlan issued a public statement refuting the New York Times’ descriptions of the company and its services. MultiPlan contends that it has consistently focused on augmenting fairness, efficiency and affordability for customers in the cost curve of healthcare.
The American Hospital Association’s letter represents the latest in a series of conflicts with MultiPlan. In the previous year, AdventHealth, a health system headquartered in Florida with more than 50 hospitals, sued the data analytics company, alleging that its practices amount to collusive arrangements and lead to a significant reduction in revenue. The case is still ongoing.